With the burden of so many subprime mortgage loans hampering Wall Street, even some one like me who works in the banking business, has difficulty figuring out the morass that is mortgage lending.
Three detailed articles on consecutive days in the New York Times attempted to simplify (including charts and graphs) financial dealings involving buying and selling loans called "securitization". It's far too confusing for any layman and this is probably the reason why so many people who qualified for subprime loans are pleading ignorance when the notice for foreclosure arrives on their doorstep of the house they purchased with no money down and made interest only payments for the last two years.
In Monday's Times, this paragraph seems to illustrate the danger these lenders have propagated on many people and the nation's economy:
The bank that holds the note as trustee claims to have no information relating to the servicer or the loan originator in spite of the fact that documents show all the parties have been working together for ages. It insulates them from liability....Securitization has made it so complicated that everyone in the process is able to say that they don’t know what’s going on. The effect is, no poor person can afford to litigate this type of matter to bring it to a resolution, and therefore they lose their home.
It's well known that the banking industry has the loudest bullhorn when it comes to lobbying Congress and tactics like securitization are the unwanted answer to this incestous equation.
The home mortgage freefall needs to become an issue that Presidential candidates of both side of the spectrum need to addresss. Conspicious lending practices to people who can't afford the loan to its entirety is a recipe to our country's economic viability.